Ask the Mortgage Experts

Capital Raising for School Fees

I own a house worth about £1.7M and my ex husband has just stopped paying school fees for our three children. I do not want to move them out of school where they are settled and the only option looks like selling the family home (bought with my divorce settlement which also acts as my pension) to fund their on-going education. I am 40 this year and wanted to know if there are any equity release options for younger people or if there are interest only mortgage options for someone whose only income is maintenance please?

Louise

I am not aware of any equity release mortgages for people aged in their 40s. The reason for this being that your life expectancy could be so long there would be a real danger of using up all the equity in your home paying the mortgage interest and the lender ending up being owed more than they will recover. The youngest minimum age available at the moment is 55.

However, despite all the recent activity with Lenders tightening up or even withdrawing their interest only policy there are still a few who will offer an interest only mortgage on the basis that you will sell your home at the end of the mortgage term to repay the capital. Fortunately the value of your home means that you will meet their equity requirements and so long as your maintenance is paid by Court Order or written agreement with at least a 6 month history, with 3 of these at the latest payment rate it should be possible for you to secure a mortgage despite not having any earned income.

The question for you is do you really want to put yourself in a position where you have to sell or remortgage onto an equity release mortgage in the future?

I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers. Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help you find the right mortgage lender and repayment terms for your situation.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

Call us on 0344 346 3672

Stay connected....

Legal

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.

John Charcol is a trading name of John Charcol Limited and its Appointed Representatives. John Charcol Limited is authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 665649. Registered in England No. 9157892. Registered office address for John Charcol Limited is 5th Floor, Cutlers Exchange, 123 Houndsditch, London, EC3A 7BU. The FCA does not regulate some investment mortgage contracts. Calls may be recorded for training and monitoring.